On January 1, 2016, a company issued $400,000 of 10-year, 12% bonds. The interest is payable semi-annually on June 30 and December 31. The issue price was $413,153 based on a 10% market interest rate. The effective-interest method of amortization is used. Rounding all calculations to nearest whole dollar, what is the interest expense for the six-month period ending June 30, 2016?
a. $24,000.
b. $24,789.
c. $20,000.
d. $20,658.
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